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GLAD Challenges IRS on Deduction for Sex Reassignment Surgery

Rhiannon O’Donnabhain “lived in anguish” as a male, struggling with the sense that she was, in fact, a female. In 1996, she was diagnosed with gender identity disorder (GID) and undertook a course of professionally prescribed medical treatments that included her 2001 sex reassignment surgery.

Ms. O’Donnabhain claimed the cost of her treatment as a deductible medical expense on her federal income tax return – but the Internal Revenue Service said no, calling the surgery “cosmetic” – like teeth whitening or hair transplants. Ms. O’Donnabhain is challenging that denial.

The trial in O’Donnabhain v. Commissioner of Internal Revenue begins on July 24,2007 in Boston. Gay & Lesbian Advocates & Defenders (GLAD) will argue in U.S. Tax Court that Rhiannon O’Donnabhain’s sex reassignment surgery was clearly medical care, and therefore as deductible as an appendectomy or heart bypass surgery. According to Ms. O’Donnabhain’s health care providers, the treatment was critical to her mental health and ability to function at all levels.

“Rhiannon O’Donnabhain deserves to be treated equally with every other hard-working American taxpayer. The IRS has politicized what should have been a routine medical deduction,” said GLAD staff attorney Karen L. Loewy. “With every mainstream medical authority from the American Psychiatric Association to the National Institutes of Health recognizing GID and its treatment, it’s ludicrous to call this surgery cosmetic.”
Ms. O’Donnabhain paid approximately $25,000 out-of-pocket for her care, including therapy, hormone treatment, and surgery. The amount of the deduction she is seeking from the IRS is about $5,000.

“While the money is significant to me, this is really about the underlying principle,” said Ms. O’Donnabhain. “I hope this case sends a clear message that transgender people deserve dignity, respect and equal treatment for our medical care.”

Loewy and GLAD Senior Staff Attorneys Bennett Klein and Jennifer Levi will represent Ms. O’Donnabhain. GLAD is working with lawyers from the Boston law firm of Sullivan& Worcester, who are serving as cooperating tax counsel in the case.

Gay & Lesbian Advocates & Defenders is New England’s leading legal rights organization dedicated to ending discrimination based on sexual orientation, gender identity and expression, and HIV status. GLAD is active in all six New England states.